A shopper opens a marketplace app during a major sale event and sees a jacket marked down 70 percent, with a crossed-out price above the new one. Urgency feels real: a deadline, a red banner, a countdown clock. What the shopper cannot see is where that crossed-out number came from, how long the item was actually sold at that price, or whether anyone bought it at that price at all. That discount looks like information about value. Often it is information about how the price was staged.
Retailers call that crossed-out number a reference price. It is one of the most manipulable figures in retail.
A seller sets a 'was' price, sometimes weeks before a sale and sometimes for only a token period at a level few customers ever paid, then discounts from that inflated anchor rather than from the price the item has actually sold at throughout the year. Between the two numbers, the real product being sold to the shopper's brain is not the coat but the feeling of getting away with something. Most shoppers anchor their judgment to the reference price sitting right there on the page, seldom checking what other retailers charge for the same item, which is exactly why that number does most of the persuasive work.
Major shopping events are built this way on purpose.
Retailers and marketplaces know the calendar of these events months in advance, which gives sellers time to raise list prices ahead of the sale specifically so they can be lowered again on the day. Platforms that run these events often display listings by discount percentage, or reward high-discount listings with better placement in search and recommendation feeds. That turns the reference price into a lever for visibility as much as for persuading any individual buyer. In effect, the event becomes an incentive structure, more than a promotional date.
Platform and retailer are the clearest winners in this arrangement. A steeper apparent discount raises conversion rates and average order size, and it does so without necessarily requiring the retailer to sell at a lower true margin, since the reference price can be set with margin already restored. Marketplaces that take a commission on each sale benefit further, because a discount-driven event compresses a large share of annual purchases into a short window. That window generates a burst of transaction volume and advertising revenue from sellers competing for placement inside it.
Brands benefit too, in a narrower way. A splashy discount clears inventory while a business can still claim the item is normally worth the higher, undiscounted figure the rest of the year.
Two groups bear the cost. One is the shopper: that shopper anchors a purchase decision to a number that may never have reflected a real transaction, and may end up paying close to the everyday price while believing they captured a rare markdown.
Less obvious is the honest seller. Smaller or third-party sellers on a marketplace face a choice: they can inflate their own reference prices to stay visible in discount-sorted search results, absorbing the cost and risk of that practice, or they can decline and lose ranking to competitors who will. Good pricing behavior becomes a competitive disadvantage inside the mechanics of the event.
That dynamic creates a specific, durable incentive, and its reward structure favors the appearance of a discount over the size of an actual price cut. A seller who has quietly kept a fair, stable price all year has nothing dramatic to slash on sale day. Their listing looks worse in a discount-sorted feed than a competitor's listing that was marked up for a month beforehand. Over repeated events, this pushes list prices generally upward between sales, since a higher 'everyday' price is what makes next quarter's discount look larger. A tool built to help shoppers compare value ends up training sellers to distort the baseline it depends on.
No single retailer's choice keeps this system in place. What sustains it is that enforcement of reference-price accuracy is inconsistent and mostly reactive. Some jurisdictions require that an advertised 'original' price reflect a price genuinely charged for a meaningful stretch of recent time, and regulators there can act against a seller found manufacturing an anchor. In the United States, similar principles exist in consumer protection law at the federal and state level. But enforcement mostly waits on complaints, investigations, or class-action litigation; routine, automated review of pricing history at scale is rare. Without a mechanism that checks reference prices as a matter of course, the incentive to inflate them persists, because the expected cost of getting caught is low relative to the sales lift.
For the incentive to weaken, the check would need to move from occasional enforcement toward real structural transparency. A rule requiring platforms to display a genuine price history, beyond just the seller's chosen reference price, removes most of the advantage of staging an anchor. Shoppers, after all, can see for themselves whether the 'discount' is new. Some marketplaces have begun surfacing lowest-recent-price data voluntarily, and in places where regulation now requires it, sellers appear to have adjusted their pricing behavior around sale events instead of fighting the disclosure. Absent that kind of default transparency, the incentive to inflate reference prices before a sale event will not fade on its own; it is a stable equilibrium that persists exactly as long as customers keep comparing the wrong two numbers.
For a shopper heading into the next major sale event, the useful habit is to treat the crossed-out price as a claim rather than a fact. Look for independent confirmation before trusting it. Price-history browser extensions and tracking tools log a product's price over the preceding months, and they are the most direct way to see whether a 'discount' represents an actual drop or a return to a price the item has held most of the year. It is also worth watching whether the same item goes on 'sale' repeatedly at close to the same price every few weeks. That pattern suggests the discount is closer to the item's real price than its list price is. As more platforms begin disclosing recent price history on the product page, whether they do so voluntarily or because a regulator required it, the disclosure works as a useful signal: it shows which marketplaces are competing on real value, and which are still counting on the shopper not checking.